On August 9, 2018 BioSpecifics Technologies Corp. (NASDAQ: BSTC), a biopharmaceutical company that originated and continues to develop collagenase-based therapies with a first in class collagenase-based product marketed as XIAFLEX in the U.S. and Xiapex in Europe, reported its financial results for the second quarter ended June 30, 2018 and provided a corporate update (Press release, BioSpecifics Technologies, AUG 9, 2018, View Source [SID1234528706]).

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"The first half of 2018 was a period of significant clinical development for XIAFLEX. We continued to focus on the execution of our ongoing Phase 1 clinical trial in uterine fibroids and have now completed patient enrollment. Uterine fibroids are the most prevalent tumor of the female reproductive tract, for which non-invasive treatment options are very limited, and we expect to report top-line data later this year. Additionally, our partner Our Endo reported rapid enrollment in the second quarter for the Phase 3 clinical trials for the treatment of cellulite, and we now anticipate top-line data in the fourth quarter of 2018," said Thomas L. Wegman, President of BioSpecifics. "On the commercial front, we were also pleased with the sustained revenue growth and continued efforts of the direct to consumer advertising campaigns for XIAFLEX in its two commercial indications, Dupuytren’s Contracture and Peyronie’s Disease, and we reported second quarter 2018 revenues of $7.1 million. These revenues were driven by Endo’s reported 27 percent revenue growth year-over-year and our partner also increased their full year revenue guidance into the high-teens percentage growth range."

Second Quarter 2018 Financial Results

BioSpecifics reported net income of $4.3 million for the second quarter ended June 30, 2018, or $0.60 per basic share and $0.59 per share on a fully diluted basis, compared to net income of $2.6 million, or $0.37 per basic share and $0.36 per share on a fully diluted basis, for the same period in 2017.

Total revenue for the second quarter ended June 30, 2018 was $7.1 million, compared to $6.5 million for the same period in 2017. The increase in total revenues for the quarterly period was primarily due to an increase in royalties associated with higher net sales of XIAFLEX which was partially offset by lower mark-up on cost of goods sold revenue in the U.S and prepaid foreign mark-up on cost of goods sold revenue recognized under new revenue standard ASC 606, as of January 1, 2018.

Licensing revenue consists of licensing fees, sublicensing fees and milestones. BioSpecifics recognized licensing revenue for the second quarter ended June 30, 2018 of $35,270 and $4,409 for the same period in 2017.

Research and development (R&D) expenses for the second quarter ended June 30, 2018 were $0.2 million compared to $0.3 million for the same period in 2017. The decrease in the 2018 period, as compared to the 2017 period, was mainly due to lower consulting fees associated with clinical, preclinical and other R&D programs.

General and administrative expenses for the second quarter ended June 30, 2018 were $2.0 million, compared to $2.3 million for the same period in 2017. The decrease in general and administrative expenses was mainly due to the lower consulting and patent fees partially offset by higher amortization associated with deferred royalty buy-down and third-party royalties associated with XIAFLEX.

Provision for income taxes for the second quarter ended June 30, 2018 were $1.0 million, compared to $1.4 million for the same period in 2017.

As of June 30, 2018, BioSpecifics had cash and cash equivalents and investments of $73.7 million, compared to $65.1 million as of December 31, 2017.

The BioSpecifics Board of Directors has authorized an increase in the repurchase amount in the Company’s stock repurchase program, previously approved by the Board in August 2015, under which BioSpecifics is authorized to repurchase up to $3.0 million of its outstanding common stock. This decision reflects BioSpecifics’ positive outlook for the future, confidence it will remain profitable on an ongoing annual basis and its continued commitment to increasing value for its stockholders.

Pursuant to the repurchase program, BioSpecifics plans to repurchase stock through a broker in the open market, provided that the timing, actual number and price per share of the common stock to be purchased will be subject to market conditions, applicable legal requirements, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended, and various other factors. BioSpecifics intends to hold any reacquired stock in treasury. The repurchase program may be suspended or discontinued at any time by the Board of Directors. BioSpecifics has no obligation to repurchase common stock under the repurchase program.

As of June 30, 2018, BioSpecifics had 7,244,233 shares of common stock outstanding.

XIAFLEX/CCH Pipeline Updates and Anticipated Upcoming Milestones

BioSpecifics manages the development of collagenase clostridium histolyticum (CCH) for the treatment of uterine fibroids and has the right to initiate the development of any new potential indication not licensed by Endo. Endo’s licensed indications include Dupuytren’s Contracture and Peyronie’s Disease, both approved and marketed; in addition to cellulite, adhesive capsulitis, human and canine lipoma, lateral hip fat and plantar fibromatosis.

Endo is conducting two ongoing Phase 3 clinical trials of CCH for the treatment of cellulite. Top-line results are expected in the fourth quarter of 2018.
BioSpecifics has completed patient enrollment in its Phase 1 clinical trial of CCH for the treatment of uterine fibroids with top-line data expected in late 2018. This Phase 1 open-label dose escalation study is being conducted at the Department of Gynecology & Obstetrics at Johns Hopkins University and is designed to enroll 15 female subjects treated prior to hysterectomy. The trial will assess the safety and tolerability of a single injection of CCH directly into the uterine fibroid under transvaginal ultrasound guidance. The secondary endpoints will assess symptoms of pain and bleeding, quality of life throughout the study in addition to size, collagen content and rate of apoptosis of CCH treated fibroids.
XIAFLEX future growth initiatives continue to support the increase in disease state awareness for both Peyronie’s Disease and Dupuytren’s Contracture through direct to consumer campaigns.